Business Plan: To introduce cosmetic products for men in Saudi Arabia

1034

13th Apr 2017

1. LETTER OF TRANSMITTAL

To Investors

I am pleased to submit my business plan for starting business entitled “The Crystal Care Limited Company”. I am looking for investments in order to implement my plan. The plan aims to attract debt finances against 10 percent cost repayable over 10 years.

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The purpose of business is to introduce Crystal Care products providing high quality skincare products for men in order to overcome the problems of oily and sensitive skin faced by most of the men. It is discussed in the business plan that the market for men’s facial skin has been growing since 2010, thus providing opportunity for the Crystal Care Limited to take advantage. Through the complete business plan, it has been defined about the Company’s plan to be successful and profitable. The business plan includes all the details about marketing, operations, development and financial plans. The business plan also incorporates market and competitor analysis, break even analysis, exit strategy, mitigation factors and sensitivity analysis.

This business plan aims to develop the interests of potential investors in order to take advantage of this essential opportunity.

2. EXECUTIVE SUMMARY AND FACT SHEET

2.1. Executive Summary

Crystal Care Limited is a new business aimed to be in started the KSA markets of skincare product. KSA market has developed over a period of years in many dimensions. Similarly, market for grooming products for men has also reported rise. In early, time products intended to enhance the masculine vanity were significantly resisted by the males in KSA. However, since recent past, notably since 2009 the market demand of cosmetics products for men has increased incrementally. Years close to 2009 reported increased demand for such products by an estimated growth of 11 percent[1]. Crystal Clear Company, therefore, is aimed to exploit eh rising opportunity by entering market as initial entrants.

Crystal Care products are centrally aimed to offer the products that are specifically designed to for resolving the skin related issues. I Due to increased environmental issues and mainly due to the climatic conditions of KSA skin issues are increasing. Most of the products in market are designed to meet the luxurious fashion requirement of men. Men are constantly in trouble to get the product that deal with both challenges. Hence, lacking of products specifically designed for the oily skin related matter of men in Saudi Arabia was defined as the opportunity for business. Products of Crystal Clear Company offers unique combination ingredients that are aimed to deal with the skin with oil as well as issues of sensitivity.

The product is also unique because it is targeting the niche male segment with skin care products with superior quality. Previously men were not concerned about using skincare products. There is a change in trend which has been observed. The male segment of the society has now started taking care of them. Men now growing use skin care products to treat their skin related problem. The market is on rise and the industry expects growth by 18% in coming years[2]. The change in trend have made men more conscious about their beauty and cleanliness while meeting the core need of attention from sensitive skin.

Being Muslim country such products were regarded as taboo under influential role of culture. However, several surveys conducted by analysts show that customer preferences have changed over time. This has motivated the businesses to enter the market. This new segment has attracted several new and old businesses towards it. This business will initially operate in KSA. Its operations KSA will be initiated by entering in the markets of Jeddah and Riyadh. Both cities rank as leading cities of KSA with large number of shopping malls offering luxurious and premium products. Considering these facilities, retail outlets will be set up in three shopping malls of Riyadh, while two in Jeddah. These shopping malls where outlets will be s set include Riyadh Gallery, Granada Center, and kingdom mall in Riyadh. Also Mall of Arabia and Heraa International mall in Jeddah It will be available through all major channels of distributors. The distributors’ channel will be focused for the sale of the product. Also the men saloon and online channel will sell the product. The company itself will operate through five outlet located at prime locations of KSA. This will make the people familiar of the products which the business is selling. The online portal would also increase customer awareness of the products and increase the sales.

High standards of the products would be delivered to the customers to generate market. Stable growth of the business and industry has been estimated ranging from 18- 25 percent while business growth is estimated to be 15-35%. As the market is defined to have the double digit growth; therefore, it is considered high time to enter the market. Another, reason for entering the market is the fact that men in KSA rely mostly on Gillette products for self-grooming while product portfolio of Gillette in the defined segment is extremely limited. This has already developed desire in customers to look for solution provider. Hence, it is considered high time for entering the market before it gets increasingly competitive. Further, improvement in growth is also estimated as recession is driving towards end. After the end of recession, the sales of the company are expected to increase more excessively. Several analysts have predicted growth for this segment of the industry. This will boost the chances of expansion and growth of the company along with the industry.

The findings from the estimated financial of the company also show that the business plan has potential for growth. The IRR and the NPV value are very high. The IRR of the business is 47 percent as compared to the discount factor applied of 15 percent. The NPV of the business is SAR 5.8 million (SAR 587,463). This shows that investing and operating in such a business is highly beneficial. This business is unique because targeting the niche male segment of the industry at such an initial phase by offering products which especially cater oily skin issue with men with new idea. This practice of the business will enable it in availing that segment which is not been targeted by anyone before with extensive high quality. This strategy of the business will provide it the essential competitive edge which is required by Crystal Care Limited.

2.2. Fact Sheet

FACT SHEET

Requested Funds:

SAR 5.05 million

Business Type:

Cosmetics shop

Sector Trend:

Growth of 18 percent is reported in the recent report from Euromonitor[3]. Market is constantly increasing potential for the business of skin care products for men from reputed brand.

Current Situation:

Gillette is the renowned brand that is offering grooming products for men but wide range of products for dealing with specific skin type issues. Also other international brands such as Givenchy, Revlon, L’Oréal etc. are also present but most of them are positioned as fashion brands. Further, only high luxurious brands have presence with respective stores.

Location:

Three store in Riyadh and two in Jeddah.Shopping malls in which these stores will be opened include: Riyadh Gallery, Granada Center, and kingdom mall in Riaydh. AlsoMall of Arabia and Heraa International mall in Jeddah

Projected Positive Cash Flow –:

Cash flow will turn positive in third year of operations by SAR 44,058.

IRR after 5 Yr.:

47%

NPV after 5Yr.:

SAR 587,463

Debt Payment Time:

10 Years

3. COMPANY SUMMARY

3.1. Company and Industry

Crystal Care Limited is a company planned to be established in Saudi Arabia with the aim of providing the best quality skincare products for men with focus on oily skin. The Company will incorporate a combination of wholesale and retail distribution network along with retailing and e-commerce. The Company’s another main source of marketing channel would be its website. The business model of the Company is built around the needs of clients. The aim of the business is to serve the market with high income level and increase in concern to treat their skin duly.

The vision of the Crystal Care Limited is to become the countrywide leader by providing high quality products of skincare to men. The mission and vision of the Company is as follows:

The Company believes that the customer is the main driver of its business. To be profitable and successful as a business the Company aims at achieving excellence in customer service. The company’s core values are customer satisfaction, honesty and reliability in its operations. For ensuring top quality service for customers the Company aims to achieve customer satisfaction by offering quality than the competition at due price. The Company would establish a friendly personal relationship with its customers and surveys would be conducted for providing high quality customer service.

3.2. PRODUCT OFFERING

The initial product portfolio of Crystal Care Company will be based on following three core items offered with variations of fragrances and level of treatment required for sensitivity issues. Hence, the product will have horizontal and vertical variations added in it.

BIOORGANIC MASK FOR SENSITIVE OILY SKIN:

Crystal Care Company aims to introduce a Bioorganic Mask to the market as its main product. The product includes a French Clay which would be imported directly from France. The product includes various different ingredients unlike others which exist in the market. This mask cleanses the pores deeply. With having a property of powerful absorption it would drag out the excess oil & germs, impurities, giving a customer clean and rejuvenates complexion. The product includes directions to use at the back. Main ingredients used in the product are French Green Clay and Aqua. The main focus of the product would be on value proposition as it targets men with self-respect and high integrity. By introducing Bioorganic Mask, the Company aims to develop a meaningful relationship with its customers and further produce more products. Other products which the Company would be offering are as follows:

CLEANSING CREAM FOR SENSITIVE OILY SKIN:

The main aim of the product would be to remove impurities gently from the skin without doing any damage to the epidermis layer. The ingredients in the product will include plant extracts which are rich in oils with having properties of regeneration. Other than this Shea nut butter would also be used as a moisturizer.

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FACIAL SCRUB FOR SENSITIVE OILY SKIN:

This product will be introduced with the aim of cleaning off the dead skin cells in order to regenerate new healthy cells, softens the layer, purifies and make the complexion enlightened. This product provides specific treatment to oily skin products and includes micro beads, aiming to boost the regeneration of cells without any irritation.

All these products are designed with specific consideration related to oily skin complemented with sensitivity, hence, can be regarded as high care products for men.

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